Traders keep bets on September rate hike after Fed meeting

(Reuters) - U.S. short-term interest rate futures contracts swung down, then up on Wednesday after the Federal Reserve ended its two-day policy-setting meeting with rates on hold as expected, but signalled its faith in the U.S. economic outlook.

The whipsaw action in the price of the futures contracts suggested traders initially saw slightly better odds the Fed will raise rates as soon as June, and then minutes later, slightly worse.

Prices currently reflect the expectation the Fed will wait until September before raising rates, based on the price of futures contracts tied to the Fed's benchmark policy rate. That's the same as before the Fed's meeting.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)